The main participants in real-time advertising

Online banners are an established form of advertising, but are they still relevant? With the ‘banner blindness’ phenomenon, we could assume the answer is no. For a long time, display marketing was a rather neglected field, and businesses tended to focus more on search engine advertising (SEA). The most recent figures reveal that more money is being spent on digital advertising than search advertising. Thanks to new technology, the traditional principle of display advertising can shine in new splendor.

Display advertising is constantly developing and real-time advertising contributes greatly to it: thanks to high efficiency, pinpoint targeting, and real-time auctions with real-time bidding, publishers get the best price, and advertisers get the best advertising space, which results in significantly less scattering loss. But how does supply and demand come together and what potential do ad exchange marketplaces actually have? To answer this, we examine the different participants and relationships in real-time advertising (RTA).

The real-time bidding process is required for the efficiency described above, as it forms the technical basis. Many important components come into play at the ad auction. The most important include:

• Visitor: when a user clicks on a site that is connected to the network, the real-time bidding process begins. The user’s profile, which has already been determined by the Data Management Platform (see below), forms the basis for the ad relevance and also the relevance of the page impression for the advertiser.

• Publisher: blog or website operators can be publishers. This means they offer space on their sites specifically for advertising purposes. By connecting to a network, advertisers are able to participate in the RTB process and place their ads.

• Advertiser: businesses or agencies can be advertisers – they buy advertising inventory in order to target their adverts to specific groups.

• Supply side platform (SSP):  SSPs are platforms that help web publishers to manage their advertising inventory. SSPs are generally bound to ad exchange platforms and attempt to sell ad impressions for as much as possible on behalf of their publishing partners.

• Demand Side Platform (DSP): Demand Side Platforms determine the demand depending on the offer from the supply side platform. Advertisers will find an interface for SSP and ad exchanges. Through the DSP, you can define campaigns and ads to fit the requirements of the target groups and take part in automatic bidding for advertising inventory.

• Data Management Platform (DMP): Data Management Platforms are used for collection, structuring, and supplying large data sets. The DMP operates in the background, but is a major player in the entire process since the inclusion of data plays an important role for the evaluation. The more the DSP knows about a user, the better it can judge whether an impression is suitable for the advertiser and their campaigns. Besides user data, other factors such as time, weather, or content categories play a part. All data is consolidated via the data management platform; the DSP accesses this data and evaluates the offered ad impressions

• Ad Exchange: the ad exchange is an online marketplace where real-time bidding takes place. This is where SSP and DSP converge. The difference between this and a typical advertising network is that a classic network can only offer bundled advertising space for an undetermined number of sites, but the ad exchange offers the advertiser concrete advertising inventory (ad impressions).

When a user visits a website with available advertising spaces, DSPs and SSPs are activated. The SSP reacts within milliseconds and sends a request to the attached DSP. Every important piece of information and parameter such as the advertising space, content categories, and the unique user ID is communicated through the request. The DSP checks whether the ad is suitable for the user. To calculate this, processes are run internally, which first compare the user profile with the specified target group parameters and then selects the appropriate campaign with the highest chance of success.

If all requirements are met, the DSP makes an offer for the advertising space on the advertiser’s behalf. The SSP receives all the bids and the highest gets the contract – this advertiser’s ad will appear on the site. Users don’t notice this as the whole process is complete in less than 100 milliseconds.

Real time advertising is no longer a fad; a huge market has developed within just a few years. This is also evident when looking at the entire advertising market. Massive growth has been predicted for the online advertising market and positive developments are down to real time advertising as well as other sectors. New technologies and options in the targeting sector enable even more efficient targeting through display advertising. Advertisers now just need to make full use of these options.